Advancing Public Health and Strengthening Fiscal Stability: Cigarette Tax Proposal for 2026-27

This Fact Sheet was developed by Social Policy and Development Centre (SPDC) in Pakistan in collaboration with Campaign for Tobacco-Free Kids, Vital Strategies, and World Health Organization. The fact sheet presents a tobacco tax proposal for 2026-27 to reduce the tax rate gap between economy and premium cigarette tiers and adjust for inflation since the tax rate freeze began in February 2023. Specifically, the researchers propose increasing the FED rate on the economy and premium brands by Rs 35 and Rs 21 per pack, respectively. As a result the tax rate for economy brands would be Rs 136, while the tax rate for premium brands would be Rs 351. The findings show that this scenario would result in 271,000 fewer adult smokers and prevent 369,000 youth from initiating use. Under this tax scenario, 95,000 adult lives and 185,000 youth lives would be saved from premature death. The tax revenue, meanwhile, would increase by 16.6%, of Rs 51 billion. The fact sheet concludes with recommendations for policy makers to restart tobacco tax increases to save lives and raise tax revenue.